What can happen if you buy a new apartment off the plans and the area is less than what you paid for

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Many apartments in Argentina and elsewhere are sold off the plans (en Pozo), and usually, this goes smoothly. However, occasionally, there is a discrepancy between the m2 paid for and the number delivered.

Sometimes, there are more and sometimes less.

However, this Buenos Aires buyer did not take this lying down. He sued and won for the missing metres.

Paola U. bought a department in the neighbourhood of Belgrano in mid-2011. When it was delivered, the property had fewer square meters than the construction company promised. The woman sued the company, and the courts agreed with her.

“The problem is that a functional apartment of a certain size was promised, and it was concluded by delivering a different, smaller one, which is a breach of contract,” the Civil Court resolved.

Now, the construction company must return to the owner the money she paid for the square meters the department does not have. They are 105 thousand pesos Argentine plus another ten thousand for moral damage plus interest since the claim began four years ago. The total compensation is about 200 thousand pesos.

The builders’ ability to do these things is due to the lack of controls. The owner must avoid signing abusive clauses, be very aware of the co-ownership regulations, and know who the builder is by reputation.

Paola U. bought in July 2011 the company “New 1817 SA”, a two-room apartment in the street of Jorge Newbery.

. It was a construction in progress, the so-called “en pozo,” and the woman had already acquired it in the final stage.

She paid $105,665 for a property of 53 square meters, the price of which was calculated. The purchase contract said that the meters were temporary and could be modified by technical work adjustments or by observations of the municipal authorities. The same contract established that the parties could not make claims for a possible dimension difference except that it was greater than 7 per cent of the agreed meters. And that was what happened.

The woman took possession of the building in December 2011, and a year later, in November 2012, she received the Co-Ownership Regulation. There, she was warned that the property had 45.05 square meters, 7.95 meters less, which made a 12.84 per cent less surface area. The exact number of meters is on the title of the public deed.

The owner sent a letter to the construction company with the claim in July 2013. Some mediation was unsuccessful, and the woman initiated a cause for damages in the courts: She demanded that they return the money she paid for the square meters that the department did not have.

The defence of the corporation that built the building – created in 2008 only for this building, something familiar in this market – was that the owner delayed presenting the claim and that the claim was prescribed.

In the first instance, the claim was rejected because it was a sale in which the price was fixed for the property itself and not for its measurements. In addition, the owner did not make any reservations or observations about the department’s meters when she took possession of it.

But the case came to Room H of the Civil Chamber, which gave the reason to the buyer for the ruling late last November. Judges Claudio Kiper and Liliana Abreut de Begher pointed out that the construction company breached the original contract.

“The problem is that a functional unit of a certain surface was promised, and it was concluded by delivering a different, smaller one, which is a breach of contract, that is, a breach of the quality of the thing sold,” Kiper said. Voting to which his legal colleagues agreed.

The judges explained that in the contract, the parties agreed that the difference in the meters could not be more than 7 per cent of what was promised. “When the plaintiff evaluated the purchase price, they would have considered the apartment size they bought.

They also ruled out the argument that the woman had not objected to the meters when she took over the property. “On the one hand, it is not easy to calculate the surface difference when taking possession. On the other hand, it is known that in these cases, the seller gives possession with prerecorded minutes and does not allow changes or reservations. In that receiving possession without making a reservation does not prevent claims for hidden defects later on, “they said.

The opinion of an expert surveyor who acted in the case confirmed the difference in square meters.

The judges also rejected the prescription argument. They said that article 4.023 of the Civil Code must be applied in the case, establishing that “all personal actions due to due debt are prescribed for ten years”.

Thus, the Chamber ordered that the construction company pay the owner for the square meters that the department lacks. The woman asked to be set at three thousand dollars USD per square meter for the value of the area. But the court took notice of what the woman paid. It was about 1993.6 dollars USD per square meter, which makes a total of 13,238 dollars, taken to pesos 105,904, considering that the dollar was eight pesos when the purchase was made.

In addition, the judges arranged for the woman to be compensated with 10 thousand pesos for moral damages. “I do not doubt the frustrating position the buyer found herself in when she realised that she had acquired a department with an area significantly inferior to the promised one,” the judges reasoned.

The 115.904 pesos of the total compensation should be applied to interest since the owner started the claim in July 2013. The total compensation is close to 200 thousand pesos.

The third judge of Room H of the Civil Chamber, José Fajre, voted in dissent. The judge claimed that the claim was prescribed. He pointed out that the woman took possession of the department in December 2011 and noticed the differences in the meters in November 2012 when they handed over the property regulations. “All this makes me presume that the measurements were not that relevant because, clearly, it has not prevented her from using the property of the purpose for which she acquired it, since if it had been so, she should have claimed an action of nullity by mistake”, noted in his vote. For this magistrate, it was not a case of damages. Still, defects are redhibitory hidden defects of something unfit for their purpose, which has three months to cancel a purchase and sale contract or initiate an action to lower the price, according to the Civil Code. “In this case, the period has elapsed comfortably” he concluded.

The moral is if you are buying off the plans, have the area measured within three months so you can make a claim if it is less than 10% of what you purchased.

(The plan shown is an example, not the case in question )

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert property acquisition and disposal advice.

www.gatewaytosouthamerica.com

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